Unmaking a rule

During their tenure at OSHA, Jordan Barab and his boss, former Assistant Secretary of Labor David Michaels, received a call from a congressional office asking how many regulations the agency had issued in the past month.

Typically, it takes much longer than that.

A 2012 Government Accountability Office study found that it took OSHA, on average, more than seven years to develop and issue a regulation between 1981 and 2010.

“For a major standard, we thought that was a conservative estimate,” said Barab, OSHA’s former deputy assistant secretary and its acting leader for nine months during the Obama administration before Michaels’ Senate confirmation in December 2009.

As an example, Barab pointed to the beryllium standards – issued in January 2017 – which took decades to complete. An OSHA flowchart detailing its rulemaking process shows that it takes about 13 years to complete all seven stages, which encompasses 48 potential steps.

In the current presidential administration, the focus is on deregulation – and experts say the process of rolling back a rule can prove just as slow.

“It takes a lot of resources, almost as much time as issuing a new standard,” Barab said. “That’s why you’re finding OSHA isn’t spending a whole lot of energy repealing old standards. They are modifying some of them, like beryllium, which is less difficult to do.”

A brief primer

The rulemaking ability of federal agencies is governed by the Administrative Procedure Act of 1946, along with the legislation that brought them into existence – for example, the Occupational Safety and Health Act of 1970.

The APA provides for notice-and-comment rulemaking. For example, an agency issues a general notice of proposed rulemaking and then provides a comment period for the public and stakeholders, which usually is at least 30 days. The agency then must review and analyze the comments and respond to certain ones before proceeding.

Executive Orders and court decisions have added extra layers to the process, including reviews by the White House Office of Management and Budget and the Small Business Administration.

For many OSHA regulations, the agency must show that the rulemaking will reduce a significant risk in the workplace. The guideline for significant risk generally is considered one fatality per 1,000 workers over their respective 45-year careers.

That’s only one of the analyses and assessments that an agency must perform in the early stages of the regulatory process. Another includes looking at the technological and economic feasibility of a new rule – on an entire industry or industries, not just individual businesses, Barab said.

The agency also must meet with internal and external stakeholders, as well as consult with one of its advisory committees if a regulation will affect certain industries.

‘Reasoned explanation’ to roll back

After completing each of those steps to show why a regulation is needed, it can be extremely difficult for an agency to reverse course unless it can provide a “reasoned explanation,” states a paper written by Denise Grab and Bethany Davis Noll, of the Institute for Policy Integrity at the New York University School of Law, published in the Energy Law Journal in November.

Grab, the institute’s western regional director, and Davis Noll, its litigation director, wrote that the APA would require courts to strike down a regulatory repeal if it’s considered “arbitrary and capricious.”

The U.S. Supreme Court affirmed that with its 1983 decision in State Farm v. Motor Vehicles Manufacturers Association, also known as the “State Farm case.” The court held that the National Highway Traffic Safety Administration could not rescind a requirement that auto manufacturers install passive restraints, which included airbags, after previously stating that “airbags are an effective and cost-beneficial lifesaving technology.”

So, if OSHA wanted to repeal its Respirable Crystalline Silica Standard, for example, the agency would have to show why its previous finding that the regulation would save more than 600 lives and prevent more than 900 new cases of silicosis each year is no longer true.

“Anything that’s from the original record becomes part of the record on repeal,” Grab said. “If what the agency says now contradicts the findings from before, the agency will have to explain why it is changing position on the prior findings it made. It has to acknowledge that it is changing position and say why it is making the change.

“If they selectively update parts of the analysis and not others, then that could cause problems for arbitrary and capricious review.”

Grab and Noll state that agencies also must take into consideration “reliance interests” – the investment of companies, organizations or others to comply with a forthcoming regulation – when attempting to repeal a regulation.

Grab used the example of an agency putting forth a rule that requires companies to develop or buy filtering devices for certain containment. Perhaps some employers have invested in those devices or other associated technologies while others have not.

“Then the folks who have done all that stuff to comply are at a business disadvantage compared with those that haven’t done the things to comply,” Grab said.

The reliance interests also can include companies that have, say, gone into business to provide those filtering devices or invested in a business strategy to sell the devices, anticipating a higher demand.

“The agency has a higher burden to explain why [it is repealing] and give a more detailed justification than it would if there were no reliance interests,” Grab said.

Noll and Grab point out in their paper that the APA includes repealing a regulation – and formulating or amending – under its definition of rulemaking (5 U.S. Code 551). That means a repeal – or, as Grab stated, a change in direction – would have to go through the same proposal submission and public notice-and-comment period as any newly introduced regulation, along with reviews.

Much of this section applies to final rules and not necessarily to proposed rules or other agency items, such as guidance documents or letters of interpretation.

Other paths to deregulation?

Congress can pass laws to repeal regulations and, recently, the legislative branch has used another tool: the Congressional Review Act.

A CRA resolution requires a simple majority in the House and Senate, along with the president’s signature, to revoke a regulation. The Senate has 60 “session” days to pass its resolution if it seeks to invoke cloture and avoid a 60-vote threshold.

CRA has been used 16 times since President Donald Trump’s inauguration, after only being used once in more than two decades – to repeal OSHA’s Ergonomics Program Standard in March 2001.

Congress also can use amendments to its budgetary bills stating that agencies cannot use money to enforce certain regulations.

Whether a president can use Executive Orders to repeal regulations is murkier, according to a July 18 Congressional Research Service report. The report points out that President Trump amended three provisions in the Code of Federal Regulations with a July 10 Executive Order regarding the hiring of administrative judges.

The report highlights the Supreme Court’s 1992 decision in Franklin v. Massachusetts, which states that the president’s actions were not “subject to [the APA’s] requirements” but courts can still review if they are constitutional. It also suggests that “other laws may govern the president’s rulemaking authority” and the APA “will likely still govern the actions of executive branch agencies implementing a presidential directive.”

What about legal challenges to regulations? Typically, courts have deferred to agencies’ interpretations of their own statutes, as long as Congress has given them authority to perform certain actions by law, such as the OSH Act, and again, as long as those actions are not considered arbitrary and capricious.

For example, in the case of OSHA, it has the authority to issue safety and health standards for workplaces as laid out in Section 6 of the OSH Act.

Judicial deference has come from a handful of cases – the most notable is Chevron v. National Resources Defense Council in 1984. The Supreme Court ruled that courts should defer to an agency’s interpretations of its own statutes as long as they’re reasonable and if Congress has not addressed the particular issue clearly.

Subsequent court decisions have limited that deference to those actions having the “power of law,” such as notice-and-comment rulemaking.

Current Supreme Court Justice Neil Gorsuch argued against the use of the Chevron deference in his dissent of a U.S. Court of Appeals for the 10th Circuit decision in August 2016. (Gorsuch’s late mother, Anne M. Gorsuch, was part of the Chevron case as EPA administrator under President Ronald Reagan.)

With a new Supreme Court justice potentially carrying the same mindset, the Chevron deference might get limited further or struck down altogether. Two other major cases, however, give agencies some deference on their decision-making: Auer v. Robbins (1997) and Skidmore v. Swift & Co. (1944).

“If [the Chevron deference] goes away, some people think it wouldn’t change all that much,” said Jeffrey Lubbers, an administrative law professor at American University. “Others think it would affect the government’s win ratio, especially in the lower courts. If Skidmore is still there, there would still be some deference. And even if Skidmore went away, it’s pretty hard to tell a court to close its eyes to the agency’s interpretation.”

Grab said she believes that if agency actions are up for judicial interpretation, then repeal attempts would fall under that same category.

“If the agency is getting less deference on its determination, it might help strike down the repeal of the regulation,” she said. “If the Chevron deference goes away, it might be harder for agencies to complete some of these repeals, but it might be harder for agencies to create regulations down the road.”